Corporate Internal Investigations – Why, How and When
In today’s increasingly competitive world, every enterprise or organization has faced complaints of harassment, accounting irregularities, or other misconduct. Though internal investigations may have been conducted before, they may not necessarily have been managed in a fair manner. In fact, corporations have only recently begun insisting on internal investigations or started taking these investigations seriously , for that matter. This is largely due the implementation of several acts and policies that primarily include the Sarbanes-Oxley Act and others from the Department of Justice, the Securities and Exchange Commission, and other law enforcement agencies. Though internal investigations have become an integral part of the ediscovery corporate landscape, it is surprising that not all enterprises and organizations are aware of the need to conduct internal investigations or how and when to conduct them.
Why Conduct Internal Investigations
Though the reasons and issues that trigger internal investigations are different for different organizations, the objective behind conducting an investigation is the same for all — conducting a fair, accurate, credible, and timely investigation.
Internal investigations are considered an annoyance by most enterprises and organizations because of ignorance about their true potential. As mentioned above, it is the implementation of various federal rules and laws, especially the Sarbanes-Oxley Act, and the fear of repercussions if the laws are not obeyed has prompted enterprises and organizations to carry out investigations for even less significant matters. In reality, if they are conducted properly, internal investigations can be the most effective tool for corporate governance. They help enterprises and organizations discipline and manage the workplace more effectively.
How to Conduct Internal Investigations
Internal investigations are conducted to find the facts behind allegations or suspicions so that the enterprise or organization can reach a conclusion. Action against any employee can be taken only if there is clear and convincing evidence to prove misconduct. Hence, an effective and credible investigation that takes into account all aspects of the case is required to determine the accurate facts.
When to Conduct Internal Investigations
Conducting an internal investigation is a very serious matter, and the decision to conduct one should be made after careful thought and analysis. However, there should not be any delay in calling for an investigation when any serious issue is brought to the notice of company management. Any allegation, however insignificant it may appear, warrants a detailed probe if it is credible and convincing. And once the decision is made, there should not be any reversal of the decision as it could lead to serious repercussions.
In the cases of major corporate scandals, the courts are very strict when it comes to internal investigations. Lapses on the part of employers pertaining to internal investigations are taken seriously. Therefore, the absence of an internal investigation or the halting of an investigation before completion is considered reckless, and the enterprise or organization would definitely face punitive damages.
In the corporate landscape, internal investigations have become a routine affair. The positive outcome of any kind of corporate investigation depends upon how effectively the enterprise carries out the probe. Therefore, adherence to proper rules and guidelines are essential for effective internal investigations.
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